When is the best time to buy a house?
This past month I had a conversation with someone that was deciding whether or not now was the right time to purchase a home. I thought sharing my perspective on when is the right time might be worthwhile for my readers. Let's call him Gary (though that's not his actual name).
Gary is a bright young man with a good job out on the east coast. He has been recently recruited by one of the top companies in Madison and planning to move here this spring. He has spent a number of years as a renter throughout college and graduate school. However, moving to Madison for this new job, he wrestled with the idea of buying his first home. Gary shared with me, "I'm not sure if I want to buy or keep renting. I'm a little concerned that the market might keep going down." Now Gary is a very smart guy (probably much smarter than me) and he wanted my help to decide whether he should buy now or keep renting.
As I learned more about his situation, it seemed to me that now might be a good time to purchase. Here's why:
Tax credits available
In case you haven't heard, the federal government is offering a tax credit for first time home buyers of $8,000. First-time buyer is defined as not owning a home for at least the past three years. There is also a $6,500 tax credit for existing homeowners that decide to purchase a new principle residence. For both of these tax credits, one must be under contract by April 30th, 2010, with an offer pending to close no later than June 30, 2010. Please note, I'm not advocating purchasing a home solely because the government is offering a tax credit, but if you were on the fence about buying then this might be a little "boost" to entice you to purchase now rather than later.
Good Job with Stable Growing Company
Another thing in Gary's favor are that his job is fairly secure with a stable and growing company. As many economists will agree, one of the primary economic drivers of any community...